Sit-Down Restaurants Raise Menu Prices Faster Than Groceries, Frustrating Budget-Conscious Diners

On May 11, 2023, people gathered for lunch at a restaurant inside the Moynihan Train Hall in New York City, as seen in a photo taken by Gary Hershorn/Getty Images. Despite flat grocery prices in May following a decrease in the previous month, menu prices continue to rise. This increase in menu prices is frustrating for budget-conscious consumers, especially when restaurants boast about discounted meals.

According to inflation data released on Wednesday by the Bureau of Labor Statistics, menu prices at sit-down restaurants increased by 0.4% from April to May, after adjusting for seasonal fluctuations. In comparison, prices at limited service establishments, such as fast casual and fast food joints, rose by 0.2% during the same period.

The disparity between grocery price increases and menu price inflation is more pronounced over the course of a year. Grocery prices went up by 1% in the 12 months leading to May, while menu prices at sit-down restaurants increased by 3.5% during that time. Limited-service restaurants experienced an even higher increase of 4.5% over the same period.

The rising prices, particularly in the fast food sector, have led to customers cutting back on dining out, undermining the reputation of restaurants as affordable dining options. While restaurants typically raise menu prices annually, the pace of increase has accelerated since the pandemic. Initially, higher prices did not deter customers